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    ACEL
    Earnings call· Jun 2026(Q2 FY26)

    Accel Entertainment Q2 FY26 earnings call ACEL

    Aug 4, 2026 Source

    Executive summary

    Accel Entertainment Q2 FY26 — Record Revenue and EBITDA, Chicago Market Opening Soon

    Accel Entertainment delivered record Q2 FY26 results, driven by strong performance in Illinois and scaling developing markets, while preparing for the imminent Chicago market opening. The company maintains a robust balance sheet and is strategically optimizing its route quality and expanding its gaming and hospitality focus for future margin expansion, with a leadership transition underway.

    Highlights

    5

    • Revenue increased 10% year-over-year to an all-time quarterly record of $368 million.

    • Adjusted EBITDA increased 11% to an all-time quarterly record of $59 million.

    • Net income was $13 million, up from $7 million in the prior year period.

    • Operating nearly 4,700 locations and more than 29,000 gaming terminals, representing year-over-year increases of 6% and 7% respectively.

    • Accel has been approved for 17 of the 39 (44%) initial establishment licenses in the city of Chicago.

    Concerns

    3

    • Nevada hold-per-day declined 15.8% year-over-year due to a mix shift towards lower hold convenience stores.

    • A noncash pretax charge of approximately $2.5 million was recorded related to older gaming equipment.

    • A $5 million noncash loss was recognized on the change in the fair value of Class A-2 contingent earn-out shares.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full year capital expenditure
    $60 million to $70 million
    medium materiality
    High
    Fairmount Park permanent casino details
    Additional details to be provided
    medium materiality
    Medium
    Nevada Rebel and Green Valley locations transition
    6- to 12-month process
    low materiality
    Medium
    Chicago market full deployment
    5-plus years
    medium materiality
    Medium
    Chicago market go-live
    Coming weeks
    high materiality
    High

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    Illinois Distributed Gaming (ex-Fairmount Park)
    Revenue growth driven by sustained improvement in hold-per-day and a high-performing customer mix, despite modest declines in location and terminal count.
    Average location hold-per-day: $992Average location hold-per-day growth YoY: 9%
    		—6%——
    Fairmount Park
    Customer engagement continues to ramp, with table games and slots gaining traction. Second racing season underway, with additional revenue supporting investments in racing purses.
    Gross profit growth YoY: 33%
    		———Highest quarterly gross profit since acquisition
    Montana
    Solid quarter, with Century Gaming completing a full machine conversion at Northern Winz Casino 2 for the Chippewa Cree Tribe.
    Location hold-per-day growth YoY: 3%
    		————
    Nevada
    Growth reflects Dynasty Games acquisition and partnership with Anabi Oil (Rebel and Green Valley Grocery). Hold-per-day decline due to mix shift towards lower hold convenience stores, with upgrades underway.
    Locations growth YoY: 54%Terminals growth YoY: 53%Hold-per-day decline YoY: 15.8%
    		—17%——
    Nebraska
    Exceptional results, becoming a meaningful contributor to overall earnings growth.
    		—55%—Significant adjusted EBITDA growth
    Georgia
    Exceptional results, becoming a meaningful contributor to overall earnings growth.
    		—47%—Significant adjusted EBITDA growth
    Louisiana (Toucan)
    Completed acquisition of Rice Palace Truck Stop Casino, adding 50 gaming terminals with plans to expand to 60. Active acquisition pipeline.
    Terminal count growth YoY: 27%
    		—14%——

    Operational metrics

    16
    Total locations
    4,700up 6% YoY
    Q2 FY26

    Total number of operating locations at quarter end.

    Total gaming terminals
    29,000up 7% YoY
    Q2 FY26

    Total number of operating gaming terminals at quarter end.

    Cash and cash equivalents
    $255 million
    Q2 FY26

    Cash balance at the end of the quarter.

    Total debt
    $573 million
    Q2 FY26

    Total debt balance at the end of the quarter.

    Net debt
    $318 million
    Q2 FY26

    Net debt balance at the end of the quarter.

    Net leverage
    1.4x
    Q2 FY26

    Net leverage ratio, noted as among the lowest in the industry.

    Revolving credit facility
    $300 millionfully undrawn
    Q2 FY26

    Available capacity on the revolving credit facility, which remained undrawn.

    Shares repurchased
    500,000 shares for $5.6 million
    Q2 FY26

    Amount of shares repurchased during the second quarter.

    Shares repurchased (H1)
    1.6 million shares for $18 million
    H1 FY26

    Total shares repurchased in the first half of the fiscal year.

    Remaining share repurchase capacity
    $146 million
    Q2 FY26

    Remaining authorization for share repurchases after replenishment.

    Capex payback period
    2 to 3 years
    Ongoing

    Expected payback period for replacement capital investments in newer, better-performing equipment.

    Noncash pretax charge (equipment)
    $2.5 million
    Q2 FY26

    Charge for streamlining equipment base, not affecting cash or adjusted EBITDA.

    Noncash loss (earn-out shares)
    $5 millionvs $5.7 million loss in Q2 FY25
    Q2 FY26

    Loss due to mark-to-market against Class A-1 share price, not affecting cash or adjusted EBITDA.

    Chicago establishment licenses approved for Accel
    17 of 3944%
    Q2 FY26

    Number and percentage of initial Chicago establishment licenses approved for Accel.

    Anabi Oil terminals
    Over 1,000
    Q2 FY26

    Total terminals with Anabi Oil in Southern Nevada after the Green Valley Grocery agreement.

    Fairmount Park racing purses increase
    $500,000
    2026 season

    Approximate increase in purses paid out over the 2026 racing season, supported by additional gaming revenue.

    Industry KPIs

    2
    MetricValueDetails
    Comparable sales comps9%%
    Net unit growth development pipeline4,700 locations, 29,000 terminals

    Deals & partnerships

    2
    Rice Palace Truck Stop CasinoAcquisition of a truck stop casino, adding gaming terminals.

    Completed acquisition in Louisiana by Toucan, a subsidiary of Accel.

    Green Valley Grocery (Anabi Oil)New route agreement to expand gaming terminal footprint.

    Extends existing relationship with Anabi Oil, further expanding the platform established earlier in the year through the Rebel partnership.

    Risks & headwinds

    3
    Nevada hold-per-day decline due to mix shiftQ2 FY26

    15.8% year-over-year decline in blended hold-per-day

    Mitigation: Upgrading equipment, refreshing gaming environments, adding payment technology, introducing loyalty programs (Gamblers Bonus Rewards); expected 6- to 12-month transition process for Rebel and Green Valley locations.

    Noncash charges impacting reported earningsQ2 FY26

    $2.5 million noncash pretax charge for older equipment; $5 million noncash loss on earn-out shares

    Mitigation: Management clarifies these are noncash items not affecting operating outlook or adjusted EBITDA, and the equipment charge improves balance sheet quality and eliminates carrying costs.

    Unpredictability of gaming expansion in new marketsOngoing

    Not quantified

    Mitigation: Company continues to monitor legislative developments and engage in discussions, but acknowledges the difficulty in predicting political outcomes for gaming regulation.

    What to watch in Q3 FY26

    5

    Chicago Market Go-Live

    Coming weeks
    CurrentFirst establishment licenses issued, city processing applications
    TargetFirst establishments begin operating

    Why it matters

    The opening of the Chicago market represents a significant near-term growth opportunity for Accel, estimated at $1 billion in total revenue.

    There have been some delays along the way, but based on where the process stands today, we expect the first Chicago establishments could begin operating in the coming weeks.

    Q&A highlights

    8

    Will Accel's market share in Chicago remain higher than its statewide average, given the initial 44% approval rate?

    Management expects their market share in Chicago to eventually align more closely with their statewide average, around the 30% mark, as the market rolls out over time.

    “I'd say that we probably will have relatively close market share in the city as we do in the state relationships in Chicago will roll out over time. And I wouldn't expect a big difference between the 2 licensees.”

    asked by Patrick Keough · answered by Mark Phelan

    2 min read6 chapters

    Detailed Narrative

    01

    Illinois Market Performance and Strategy

    Illinois distributed gaming revenue, excluding Fairmount Park, grew 6% year-over-year. This growth was primarily driven by a 9% increase in average location hold-per-day, reaching $992, despite a modest decline in both location and terminal counts. Management emphasized that the strategy focuses on maximizing revenue and profitability per location rather than machine count, with TITO technology rollout complete and showing positive customer response and operational efficiencies.

    02

    Chicago Market Opening and Opportunity

    The Illinois Gaming Board has issued initial establishment licenses for video gaming in Chicago, with Accel securing 17 of the 39 (44%) approved locations. The city's Department of Business Affairs and Consumer Protection is now processing city licenses, and the first establishments are expected to begin operating in the coming weeks. The company is operationally ready, leveraging existing infrastructure and relationships, and estimates the Chicago market could generate approximately $1 billion in total revenue, with full deployment over 5+ years.

    03

    Developing Markets Driving Earnings Growth

    Nebraska and Georgia delivered exceptional double-digit revenue growth of 55% and 47% respectively, becoming meaningful contributors to Accel's overall earnings growth, not just revenue. These markets are scaling quickly, and the company plans to deploy additional capital to capitalize on their attractive long-term returns. Louisiana also saw Toucan revenue increase 14% year-over-year, with terminal count up 27%.

    04

    Nevada Expansion and Portfolio Mix Shift

    Nevada revenue increased 17% year-over-year, with locations and terminals growing 54% and 53% respectively, largely due to the Dynasty Games acquisition and a new route agreement with Green Valley Grocery, expanding the Anabi Oil partnership to over 1,000 terminals. This rapid expansion into convenience stores, which have lower hold-per-day than participation bars, led to a 15.8% decline in blended hold-per-day. However, the company is upgrading equipment and player experiences, expecting a 6- to 12-month transition for these locations.

    05

    Strong Capital Allocation and Balance Sheet

    Accel repurchased 500,000 shares for $5.6 million in Q2, contributing to $18 million in repurchases for the first half of the year, with $146 million remaining capacity. The company ended the quarter with $255 million in cash, $318 million in net debt, and a net leverage ratio of 1.4x trailing 12-month adjusted EBITDA. A $300 million revolving credit facility remains fully undrawn, providing significant financial flexibility for investments and shareholder returns.

    06

    Leadership Transition and Strategic Vision Shift

    Andy Rubenstein is transitioning from CEO to Chairman, with Mark Phelan assuming the CEO role. The new leadership emphasizes a strategic evolution for Accel, moving from a logistics business to a gaming and hospitality company. This shift focuses on enhancing player experience, content, relationships, and customer service to drive future margin expansion and create a more valuable business for shareholders.

    AI-generated summary of the company’s earnings call. Not investment advice.